In an efficient market, the price of a security will

• A. react immediately to new information with no further price adjustments related to that information.
• B. react to new information over a 2-day period after which time no further price adjustments related to that information will occur.
• C. rise sharply when new information is first released and then decline to a new stable level by the following day.
• D. always rise immediately upon the release of new information with no further price adjustments related to that information.
• E. be slow to react for the first few hours after new information is released allowing time for that information to be reviewed and analyzed.

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Which one of these is an indicator that a market is efficient?

• A. Positive serial correlation coefficients equal to or greater than 1
• B. Lack of daily price movement
• C. Lack of any adjustment for degree of risk
• D. Repetitive price patterns
• E. Normal rates of return

Beta values are highly dependent on the

• A. direction of the market movement.
• B. overall cycle of the market.
• C. variance of the market and asset, but not their comovement.
• D. covariance of a security with the market.
• E. market risk premium.